MICROECONOMICS Essay Example | Topics and Well Written Essays - 1250 words

MICROECONOMICS - Essay ExampleEconomics, as stated is the study of both one-on-one and the government and business behavior in terms of price, interest rates, jobs, poverty, employment, etc. As such, it has to deal with groups of people which is classified into categories namely households, business and government to facilitate the analysis of behavior. While individual behavior study is termed micro-economics, study of people at large is called macro-economics. Also, actual behavior of people fall under descriptive economics while advice or choices of economists comes under normative economics.It is evident that when policies and structures ar to be studied in totality, individual chemical reactions can deliver highly variable results. As a result, economists choose simplified individual responses by setting out average of a large number of responses and which represent in a similar fashion or towards a common goal.On the basis of this concept, assumptions step up which turn into simplified models or theories of economics because they demonstrate a common and shared behavior of a large group of people. For instance, assumption of profit maximization relates to suppliers because in a particular situation, average response of a number of suppliers would be that of maximizing their profits. Likewise, assumption of satisfaction maximization applies to buyers as they tend to acquire maximum satisfaction from their investments.Market in economics refers to the place where interaction between buyer and marketer takes place. Level of scarcity in the production or delivery of a service determines its market value. superfluity product comes at lower price while scarce product is associated with higher price. When government intervention happens in the market due to price or supply concerns, it gets turned to public goods.Scholars of economics are continuously confronted with some difficult terms